I’ve long shouted about the nonsense being spouted about Ireland’s economy by people looking to use it as the poster child for their mad plans: for ‘reform’ when it was booming and (strangely enough) for reform and austerity now it’s in depression.
Here is something similar about Iceland

Since people continue to spread the factually dubious statement that Iceland “told creditors & IMF to go jump, nationalised banks, arrested the fraudsters, gave debt relief and is now growing very strongly, thanks” I find I have to write this here thing.

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Because, for some reason, people won’t believe Icelanders when they say that the above is not quite the reality as most Icelanders experience it.

He describes an economy that’s still in a lot of trouble and a political system that hasn’t done half of what it’s purported to have done.

I’ve heard a couple of places that the story about Iceland’s economy that’s doing the rounds isn’t entirely accurate - inaccuracies helped by Iceland being far away and not in English, though being English speaking doesn’t help a true picture of Ireland escape.

Iceland didn't bail out the collapsed banks, but that wasn't for the want of trying. If you read through the Report of the Special Investigation Commission you'd find out that the Icelandic government tried everything it could to save the banks, including asking for insane loans to pay off the banks' debts.

The true story, according to Bjarnason, is that Iceland did everything it could to save creditors. "The only reason why we didn't is that the Icelandic government, then and now, is completely incompetent." There follows a list of stupid things attempted or done by the Icelandic government. And some that were corrupt.

Nationalisation of the banks? Bjarnason says two out of the three major collapsed banks are now owned by the (supposedly shafted) creditors (the third, Landsbanki, is involved in litigation concerning Icesave and is still government-run). Nationalisation itself, he suggests, is in any case a misnomer for the emergency control process used.

There has been plenty of debt relief here. The the top 1% has had almost all of their debt written off, for example. Wasn't that nice of the banks?

For the rest of us, the picture is a lot more complicated.

Strong Icelandic growth? He admits there may be discussion on this point, and goes into it in some detail. His take is that growth is at 2.7% but inflation at 4-5%. But of course you could always have inflation at 2% and no growth at all.

This isn't a blog post on economics. Pointing people at the public record, what legislation was actually enacted and what wasn't, what court cases were won and lost, who was prosecuted and not, what actions the government took and not, is not economics and not open to interpretation. You can debate about the long-term effects of the legislation that was enacted (and there's a debate to be had there) but you cannot debate the basic facts of what was actually done and what wasn't.

Nationalisation of the banks? Bjarnason says two out of the three major collapsed banks are now owned by the (supposedly shafted) creditors (the third, Landsbanki, is involved in litigation concerning Icesave and is still government-run). Nationalisation itself, he suggests, is in any case a misnomer for the emergency control process used.

But at least they managed to take the banks into receivership (even if it was through incompetence). So that is a plus.

Surely an important point is that while Iceland may still be in trouble, there are places like Latvia which followed a different policy direction - the austerity direction we associate with the Troika and IMF, even if Blanchard and Lagarde are now moving towards saner concepts.

And those places, like Latvia are doing significantly worse than Iceland, in ways that match predictions of Keynesian-types.

Sweden is a country that is also often featured in the mythological realm. I had a strange experience reading Catch 22 in the aftermath of the FRA legislation, when parliament despite public outcry voted for mass surveilliance. In the end of Catch 22, Yossarian has a vision of one of the other soldiers reaching a well-organised, rational and above all sane place: Sweden. And I felt I wanted to go to that Sweden instead of the one I was living in.

Anyway, I think the myths are spread because the myths are needed. All relation to actual places are entirely coincidental.

Iceland's ambassador to Brussels has denied reports that accession talks with the European Union were dead, telling EurActiv that only the thorniest negotiating points are on hold until after upcoming elections.

"The correct message is that we are slowing down the negotiations, and we are not disbanding them. That has never been an issue," Ambassador Thorir Ibsen told EurActiv on Wednesday (16 January).

bound to be controversial, and so it remains, on both sides of the ideological fence. I confess that it took me a long time to see that what they were doing was the correct path, in large part because even if my ideological sensitivities are a bit to the left, my economics training was very conventional.

And still...I am sceptical, though all the same hopeful that the math will prove itself in a larger economy. Fortunately, Japan appears to be voluteering to be the next guinee pig.

The Hun is always either at your throat or at your feet.
Winston Churchill